Kohl says merger would be harmful to consumers, contrary to antitrust law and not in public interest

Washington, D.C. – The Rural Telecommunications Group (RTG) today applauded Senator Herb Kohl, Chairman of the Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights, for issuing a letter to the Federal Communications Commission and Department of Justice expressing his opposition to the proposed AT&T merger with T-Mobile. In the letter, Sen. Kohl urged agency officials to block the merger, stating it would, “cause substantial harm to competition and consumers, would be contrary to antitrust law and not in the public interest.”

“We are deeply encouraged by Senator Kohl’s opposition to AT&T’s takeover of T-Mobile, which will constrain innovation, limit choice and increase costs to consumers,” said Carri Bennet, General Counsel, Rural Telecommunications Group. “Rural wireless carriers throughout the country are concerned the acquisition will put them out of business, and we are pleased Senator Kohl recognizes the devastating impact it will have on their communities. AT&T’s sole motivation is to eliminate competition, which is not in the best interest of rural America or the general public. We urge DOJ and FCC to take into consideration the important arguments made by Senator Kohl in his letter.”

Kohl Says National Carriers Will Hamstring Small Carriers

In Senator Kohl’s letter, he specifically identified a growing concern amongst rural wireless carriers. Today, AT&T and Verizon currently own a majority of the backhaul infrastructure and special access networks in the United States. This infrastructure is used by rural wireless carriers to connect their towers and provide service to customers. The merger will enhance AT&T’s power over the wholesale roaming marketplace, enabling it to dictate prices, terms and conditions to rural carriers seeking roaming arrangements. In the letter Sen. Kohl states:

“The bottom line is that the smaller local and regional cell phone companies will be paying their national competitors large sums of money in order to provide their customers nationwide cell service. Placing such a key input in the hands of their national competitors unquestionably will hamstring these smaller carriers in their efforts to compete with the national cell phone companies.”

“If the takeover is approved, AT&T will have the ability squeeze out rural wireless providers, as they could be subject to higher costs for using backhaul infrastructure and providing roaming access, resulting in higher bills for consumers,” Bennet continued. “If AT&T were serious about expanding rural coverage they could do so. They already possess the spectrum and could expand coverage at a fraction of the cost compared to gobbling up T-Mobile, a company that has very little reach in rural America. Their true intent is to dominate the marketplace, and we are pleased to have Sen. Kohl advocating for consumers, jobs and small businesses in rural America.”

Recently, State Attorneys General from Minnesota, Illinois, Pennsylvania, Arizona, Florida, Hawaii, New York, Texas and Washington have opened investigations into the merger.

About RTG – Headquartered in Washington, DC, the Rural Telecommunications Group, Inc. (RTG) is a trade association representing rural wireless carriers who each serve less than 100,000 subscribers. RTG’s members have joined together to speed delivery of new, efficient and innovative telecommunications technologies to remote and underserved communities. ruraltelecomgroup.org @RTGwireless

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